NVIDIA Regains Top Spot; FOMO Is Why It Will Continue to Rise
NVIDIA's market is returning to a simmer and could boil over with the drop of a headline as FOMO rips through it; a robust upside is indicated.
This story originally appeared on MarketBeat
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NVIDIA's (NASDAQ: NVDA) stock price has risen more than 60% from its April low in early June and is likely to continue growing, potentially much higher due to the forces driving it.
Fundamental and technical factors aside, the rebound is helping NVIDIA regain its position in terms of market cap and stock size, bringing another factor into play: FOMO. FOMO, or the fear of missing out, is the anxiety caused by thoughts that something might be happening that you could be missing.
In this case, investors could be missing substantial capital gains and higher share prices. The potential for higher share prices is significant. Analysts have been raising targets since the FQ1 earnings report and are leading to the high-end range, a move to $200 to $220, or about 20% at the consensus of $171 and nearly 60% at the top end.
A move to the top end could happen quickly, as news headlines accelerate a positive feedback loop in which higher prices underscore the gains that average investors are missing and the potential still present in the market.
NVIDIA's News Cycle Fuels FOMO in June
Among those factors is the news cycle. Not only is NVIDIA's market cap garnering attention, increasing general market anxiety, but the news cycle is robust. There has been a steady series of bullish news events since the Q1 release, including business advancement and analysts' commentary. The business advancements include plans to build a new supercomputer for the Department of Energy. Slated for 2026, it will be built on the next-generation Rubin platform and is expected to compress research time from years to days.
Other advancements include CoreWeave's launch of what is now the largest, most powerful NVIDIA GPU cluster ever benchmarked, as well as the expected impact of the Stargate project. Analysts at UBS see NVIDIA as the primary beneficiary of what was announced as a $500 billion project. The driver for NVIDIA will be the compute needs as OpenAI scales up. The benefit could top $25 billion, including networking and ancillary costs, depending on the total size and GPU/CPU mix. As it stands, the first Stargate data center is forecasted to require 400,000 NVIDIA GB200 GPUs.
Upcoming catalysts for NVIDIA's stock price are the expected launch of NVLink Fusion silicon for semi-custom AI infrastructure and the deal with Saudi Arabia's HUMAIN. The NVLink Fusion system creates an ecosphere in which NVIDIA chips are linked with third-party CPUs and ASICs with the NVLink system. NVLink enables NVIDIA GPUs, CPUs, and ASICs to interconnect with each other, increasing efficiency and reducing latency typically found in other CPU and ASIC configurations.
Regarding HUMAIN, the deal is worth several hundred thousand NVIDIA Grace Blackwell GPUs and upcoming Rubin GPUs, including hardware and software to maximize their use. It has yet to appear in the results or guidance and is expected to inject billions into the results annually.
NVIDIA's Stock Price Is Near a Critical Pivot Point
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NVIDIA's price action is rising in early June and approaching the critical pivot point of the all-time high. A move above or even to the all-time high would intensify FOMO in the market and likely lead to an influx of money. The influx could gain momentum and sustain an upward lift due to the impact of indexing.
The S&P 500 and most indices and ETFs pegged to it are market-cap weighted, which means as NVIDIA's stock price rises and its market capitalization grows, its influence on the index will increase, and the indices and ETFs pegged to it will have to buy more to keep up.
The chart technicals are favorable. The rise in share prices is accompanied by bullish MACD, a bullish crossover in stochastic and the moving averages, which are pointing higher. The indication is for a retest of critical resistance by early summer, with a chance of new highs in late June or early July. The risk is that resistance in the range of $150 will cap gains and keep this market in check until later in the year when subsequent earnings reports may provide a catalyst.
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